Some wealth managers have shut down any technology projects during the crisis, and others are stepping on the accelerator pedal, argues a firm that has offered a licence-free period to subscribers of its digital offering committed to during this year.

Some wealth managers are putting digital transformation projects on hold due to the global pandemic while others are stepping up the pace enabled by remote working and disruption, according to Objectway, the Europe-based wealth management software provider. The firm is offering a licence-free period to any subscriber of its digital service in 2020 called Objectway WealthTech Suite.

The firm is prompting take-up during the disruption to normal business patterns caused by the global COVID-19 pandemic. The crisis is going to upend how the private banking and wider financial sector uses technology, it told this publication.

Objectway said that it has created a “fast-track approach” so that offerings such as mobile apps for investors can be established in a matter of months.

“This emergency is exposing the delay in digital transformation accumulated in the wealth management and private banking industry,” the firm said. “COVID-19 measures have first restricted and then completely locked-down any face-to-face meetings between advisors and investors: in such a highly personalised segment, with customers demanding special attention and frequent in-person interactions with their relationship managers, investors feeling disoriented and not properly served in this situation will soon start looking elsewhere.”

The Objectway WealthTech Suite covers a variety of offerings, including remote advisor-client digital collaboration with secure chats, remote video face-to-face meetings, secure screen sharing in full privacy, and real-time access to investments via a variety of devices.

“Soon after the implementation of our contingency plan, we were ready to deliver as usual to our clients, applying agile development and dev-ops methodologies. Conscious of how this emergency is affecting our customers' business, we have immediately started to think how we could help them cope with such a disruption,” Luigi Marciano, chief executive and founder of Objectway Group, said.

Forces in conflict
This news service asked Objectway how the pandemic and associated disruption would affect how wealth managers use technology and how it will influence their buying habits.

The firm said there are “two contradictory factors at this time” that affect technology and upgrades. Firstly, it said, there is a “clear digital gap in the wealth management sector that pushes for a speed-up of digital transformation”. Secondly, wealth managers face a big drop in asseets under management, which puts budgets for projects under pressure.

“Wealth management has historically emerged as a highly personalised professional service with customers demanding special attention and highly skilled relationship managers for frequent and intensive face-to-face interactions. Satisfied with its level of customer centricity, firms in the sector had overlooked the importance of critical changes happening in the market, like the digital transformation, falling somewhat behind the progress being made in other sectors,” the firm said.

“Now, suddenly coronavirus measures have first restricted and then completely locked-down any face to face meetings with customers, and there are no clear plans and dates as to when it can safely happen again. Many investors have, as a consequence of the digital gap, panicked - stuck at home without direct access to their investments’ situation. Those who will not feel properly served in these emergency times, will soon start looking elsewhere,” it said. 

Objectway said that market reactions have been very different: some businesses are freezing all projects indefinitely, but others have accelerated digital transformation.

What sort of strains have been generated by the pandemic?

“The strongest strain is in enabling the digital collaboration between clients and advisors, and giving investors real-time direct access to their investments. A recent research by Scorpio Partnership, has shown that 47 per cent of HNW investors, if they were CEO of their wealth firm for a day, would prioritise innovation in digital to improve their client experience. This emergency is unfortunately exposing the delay in digital transformation accumulated today in the wealth management industry,” the firm said.

Objectway said there is strong demand for real-time multi-device access to investments, market research papers and news for investors through portals and mobile apps. It also sees strong demand for remote advisor-client digital collaboration with secure chats, remote video face-to-face meetings, secure co-browsing where the advisor cannot only talk with customers but also walk them through their updated investments showing graphs, trends, or assist them in learning how to use the self-service channels. There is also big interest in proactive alerts and notifications, but also personalised content on market evolution and documents sharing.

The firm, which was established 25 years ago, services clients across a variety of regions. Clients include HSBC, Investec, Edmond de Rothschild and Nedbank.